UK finance ministry warns on Scottish independence costs

Sun May 25, 2014 7:01pm EDT
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LONDON May 26 (Reuters) - Britain's finance ministry stepped up its attack on the Scottish government's independence plans on Monday, saying it had not fully budgeted for setting up a new administration that could cost Scottish taxpayers over 1.5 billion pounds ($2.5 billion).

People in Scotland vote on Sept. 18 on whether to end a 307-year union with England and split from the rest of the United Kingdom. Britain's finance ministry has repeatedly argued that Scots would be financially worse off after independence.

On Monday, it said setting up the new public bodies such as a Scottish tax authority, financial regulator and benefits system would cost each Scottish household a minimum of 600 pounds, and potentially much more.

"The Scottish government is trying to leave the UK, but it won't tell anyone how much the set-up surcharge is for an independent Scotland," deputy finance minister Danny Alexander said.

He is due to present a more detailed breakdown of the Westminster government's estimates of the costs of Scottish independence and Scotland's budget deficit on Wednesday.

The Scottish government dismissed the report as "deeply flawed".


The British finance ministry said new institutions would cost Scotland at least 1 percent of its annual economic output - or 1.5 billion pounds - based on estimates made when the Canadian province of Quebec voted on independence.   Continued...